The 10 Commandments of Closing a Mortgage

By: Melissa Kuczepa

Whether you are buying a property or refinancing one, your financial situation must remain constant and reliable throughout the mortgage lending process. This allows the lender to feel confident you will be able to uphold your part of the mortgage commitment. If the lender is not confident, or your situation changes, they may decline your file and your funding will fall through. This could have many very negative implications. This is especially true if you are purchasing a house and the offer is firm. You may be liable for costs incurred by the seller and there could be legal proceedings taken against you.

Below, you will see a list of ten common occurrences that can send your file straight to your lender’s decline pile.

Thou Shall Not change jobs or become self employed.

Thou Shall Not buy a new vehicle unless you plan to live in it.

Thou Shall Not use your credit cards or let your payments fall behind.

Thou Shall Not spend money you have saved for your down payment, get a gift for closing or take a new loan without first consulting us!

Thou Shall Not buy furniture before you buy your house.

Thou Shall Not make any large deposits into your bank account unless you can document the origin of the money (basically anything that is not payroll)

Thou Shall Not originate any new inquiries on your credit report.

Thou Shall Not take an unexplained leave of absent from work.

Thou Shall Not co-sign for anyone.

Thou Shall Not purchase anything of substantial cost before closing.

As you can see, some of these items may not seem as though they will have a large impact on your file but if your debt servicing ratios were tight to begin with, any of these items could derail your entire mortgage commitment. Before you make any large purchases or think of making a substantial change to your situation (as outlined above), check with your Mortgage Broker, they will let you know how the change(s) could impact your file and what the implications will be